Made in the USA: Briefs, Bras, Billions
With high-end undershirts, "spare panties" that fold up to the size of a pack of gum and other specialty products, underwear entrepreneurs are cashing in on an estimated $30 billion industry.
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Here's the upside to running an underwear business: Virtually every person on the planet is a potential customer.
You already know the big names in underwear -- Hanes, Fruit of the Loom, Victoria's Secret -- which help fuel an estimated $30 billion industry worldwide. But a number of smaller businesses have found success in the skivvies market as well, by identifying and filling niches that the larger brands either don't want to chase or simply haven't thought of.
Take Tom Patterson. Just a few years ago, he was working as a medical-device salesman. Today, his company, Tommy John, brings in about $2 million in revenue, has a handful of employees and makes the top-selling undershirt at Neiman Marcus and Nordstrom.
Patterson's million-dollar idea was born out of frustrations with the undershirts in his own closet. "I had these boxy undershirts, and they turned yellow pretty quickly," says Patterson, 29. His basic white T-shirts were always coming untucked, so they often bunched up under his dress shirts. One day, when he got out of his car, he discovered his T-shirt was rolled up to his belly button. That spawned the idea: Create a high-end undershirt that never comes untucked.
He started doing research and haunting fabric manufacturers in downtown Los Angeles until he found one that could make the type of T-shirt he wanted, which was a cross between traditional box-cut cotton undershirts and men's shapewear and compression garments, which can be expensive and sometimes constrictive.
After the research phase, he made about 100 phone calls over five months, trying to find someone who would sell his T-shirts. He drained his 401(k) and was down to his last $800 when Neiman Marcus gave him a 15-store test order. It turned out to be Neiman's highest-performing new brand in the store's history, according to Patterson, and the retailer quickly ordered more T-shirts, which sell for $36 apiece -- enough for all 42 of its locations. Nordstrom came aboard three months later, and Patterson recently added another high-profile catch: Saks Fifth Avenue. The company has also branched out into briefs, tank tops and other garments.
Hey, Sew Sister
Megan Chappuis Summerville, CEO of Sew Sister in Austin, Texas, had slightly more industry experience when she embarked on her entrepreneurial journey in 2003. "I started as a pattern maker, which led to me doing alterations for a lingerie fitting shop," she says.
After three and a half years working at the shop, she met a woman in East Texas who was looking for someone to buy her bra business. Summerville purchased the company, called Specialty Made, and transformed it into Sew Sister, which produces hand-stitched lingerie for hard-to-fit women and is sold online and in some brick-and-mortar stores, including her own pop-up shop. She focuses much of her time educating her customers about the proper fit of bras and the potential dangers of bras made with polyurethane cup bras. (The chemical in polyurethane has been linked to breast cancer.)
Summerville loves what she does, but has learned that her industry has a few image problems. Underwear is a product nobody seems to want to talk much about. As Summerville as discovered, we all have our own hang-ups. "As soon you say 'bra, panty, underwear or intimate apparel,' you get looks and uncomfortable chuckles," Summerville says. "You want to get new business, but these are not socially acceptable things to talk about."
It can be especially tricky being an underwear entrepreneur on the World Wide Web. Summerville has been dumped and ignored on Twitter and Facebook by potential contacts, only to later learn that they had seen the word "lingerie" on her website and were turned off.
"Oh, I didn't follow you at first," she has been told by people on Twitter. "I thought you were a sexpot."
There are other problems inherent in the underwear world that you won't necessarily find elsewhere. For starters, even though everyone needs undergarments of one variety or another, the industry isn't as "recession proof" as you might think. In fact, former Federal Reserve Chairman Alan Greenspan used to look at underwear sales when monitoring the nation's economic health. His reasoning was that since men's underwear is largely more a necessity than a fashion choice, briefs and boxers are the first thing men stop buying when the economy goes south.
Underwear is also a part of pop culture, providing both positive and negative effects on the industry. For instance, when it was famously revealed that Clark Gable's character did not wear an undershirt in the 1934 movie It Happened One Night, undershirt sales plummeted. But if Gable was the underwear entrepreneur's worst enemy, there should be a shrine somewhere to Marlon Brando and James Dean -- when they sported their signature white T-shirts in 1950s films The Wild One and Rebel Without a Cause, undershirt sales surged.
But as the market has become more fragmented and entrepreneurs identify certain niches, they have been able to avoid spikes and drops in sales. Ezra Nasser, 39, and Yossi Nasser, 30, are the founders of Body Naturals, a 55-employee, New York-based company that makes plus-size underwear and lingerie. "Only 30 percent of the merchandise available today caters to this category," Ezra Nasser says. "We see tremendous opportunity."
And Cheryl Foster, 52, based in Waco, Texas, is hoping the old adage -- "always wear clean underwear" -- will pave the way for a lucrative business.
In 2004, while Foster was out with her gal pals, one of them mentioned that she always kept a spare pair of underwear in her car's glove compartment. The idea for SPairz was born -- the "SP," of course, stands for "spare panties." Foster sells underwear, from sizes XS to 3X, that is compressed and shrink-wrapped into the size of a business card or pack of gum, so customers can store them anywhere. "I'm still trying to figure out which industry I'm in," she says. "I don't follow the normal apparel calendar rules -- no lines, colors, styles, seasons. My product can fall just as easily into the gift industry. They make great stocking stuffers or bon voyage gifts."
"Or I could even be in the insurance business," Foster adds, "since that's what SPairz are -- insurance against accidents."
Geoff Williams is a regular contributor to AOL Small Business.